Safe and Sound

SOUTHWEST LOUISIANA

LAKE CHARLES, LA
5
Star Rating
LAKE CHARLES, LA-based SOUTHWEST LOUISIANA is an NCUA-insured credit union started in 1952. As of December 31, 2017, the credit union held assets of $96.9 million.

With 44 full-time employees, the credit union holds loans and leases worth $63.2 million. SOUTHWEST LOUISIANA's 17,858 members currently have $81.6 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, SOUTHWEST LOUISIANA exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a look at how the credit union did on the three major criteria Bankrate used to evaluate U.S. credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring a credit union's financial fortitude, capital is key. It acts as a buffer against losses and provides protection for members when a credit union is experiencing economic trouble. When it comes to safety and soundness, more capital is preferred.

SOUTHWEST LOUISIANA achieved a score of 20 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, better than the national average of 15.65.

SOUTHWEST LOUISIANA appears to be stronger than its peers, with a capitalization ratio of 20.00 percent in our test, above the average for all credit unions.

Asset Quality Score

In this test, Bankrate tries to determine the impact of troubled assets, such as past-due mortgages, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.

A credit union with a large number of these types of assets could eventually have to use capital to cover losses, diminishing its buffer of equity. Many of those assets are also likely to be in non-accrual status and thus aren't earning interest for the credit union, resulting in depressed earnings and potentially more risk of a failure in the future.

SOUTHWEST LOUISIANA finished below the national average of 38.09 on Bankrate's test of asset quality, racking up 36 out of a possible 40 points .

A below-average ratio of troubled assets of 0.00 percent in our test was potentially indicative of superior financial strength compared to other credit unions.

Earnings score

How successful a credit union is at earning money has an effect on its safety and soundness. A credit union can retain its earnings, expanding its capital cushion, or put them to work addressing problematic loans, likely making the credit union better prepared to withstand economic trouble. Losses, on the other hand, reduce a credit union's ability to do those things.

SOUTHWEST LOUISIANA scored 14 out of a possible 30 on Bankrate's earnings test, beating out the national average of 10.11.

One sign that SOUTHWEST LOUISIANA is outperforming its peers in this area was its earnings ratio of 0.00 percent in our test, higher than the average for all credit unions.

WHAT IS SAFE & SOUND?

Bankrate.com's Safe & Sound Ratings provide a star rating system to evaluate the current financial status of financial institutions. The information gathered about banks, credit unions and thrifts is updated as set forth in the Terms of Use of Safe & Sound Ratings and Reports. The Safe & Sound Ratings information is grouped by categories of banks, thrifts and credit unions.

Scoring methodology

Bankrate.com evaluates the financial condition of institutions and assigns a one- to five-star rating for each with five stars representing the highest rating. Institutions with satisfactory performance will generally receive a rating of three or more stars. The majority of institutions fall into the three- to four-star range. An institution with an "NR" rating may be too new to rate or may have limited the publicly available information in their regulatory filings. The "NR" is not an indication of financial strength or weakness. The Safe & Sound rating is believed to be reliable, but the information is not guaranteed. In addition, events since the information was collected may have altered the institution's financial condition.